The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.NEW YORK ( ETF Expert) -- In the first two months of the year, SPDR Dow Jones Industrials ( DIA) garnered 6.5% and the underlying benchmark made a successful run at 13000. It was a phenomenally fast start that persuaded many investors with cash on the sidelines to reconsider. Perhaps surprisingly, foreign stock ETFs dramatically outperformed domestic counterparts in January and February. For example, Vanguard Emerging Markets ( VWO) raked in 16.8%, Market Vectors Brazil Small Cap ( BRF) rocketed 27.9% and Wisdom Tree India Earnings ( EPI) catapulted 31%. In essence, the "risk trade" was striking Madonna's vogue pose. However, things changed in the month of March and the mainstream media seemed to miss it. Even as the S&P 500 topped 1400 - and even as the Nasdaq surpassed 3000 -- significant risk assets were starting to slide. Specifically, energy and materials stocks dipped; small-cap U.S. stocks waned. And most notably of all, emerging market equities everywhere responded poorly to weak demand from China. Personally, I don't view potential contraction in China's manufacturing sector or uncertainty over a so-called property bubble as alarming. On the contrary. I believe Chinese authorities will exert their fiscal firepower in the form of a direct stimulus package and People's Bank leaders will lower interest rates and cash reserve requirements as needed. Ultimately, that will benefit investors in certain aspects of the emerging market space. However, I am troubled by economic contraction in Europe as well as the burdensome rise in Spanish bond yields. With eurozone PMI declining to 48.7 in March, and
In sum, Spanish bond yields are rapidly rising, picking up where Italian bond volatility left off. That is rekindling concern in the inter-bank lending rate, which causes investors to back away from foreign equities. Eventually, global fears are likely to drag on U.S. equities as well. Do I think investors should run from the hills? Nope. Here are several Dividend ETFs that I'd look to pick up on fear-driven sell-offs: 1. EG Shares Low Volatility Emerging Market Dividend ( HILO). This exchange-traded tracker has greater relative strength than its most appropriate benchmark, the MSCI Emerging Market Index; in fact, the HILO:VWO price ratio is well above an intermediate-term (50-day) moving average. HILO also tracks an index with a yield in the 6% range. Best of all, those high yields are primarily coming from less risky segments of emerging economies, including telecom and utilities.
2. Guggenheim Multi-Asset Income Fund ( CVY). This exchange-traded fund offers more than a way to track dividend paying stocks. It also targets master limited partnerships (MLPs), real estate investment trusts (REITs), closed-end funds (CEFs) and preferred shares as a way to enhance cash flow. Whereas the S&P 500 SPDR Trust ( SPY) may be able to deliver 1.9% annualized, CVY is currently offering 5.0%, and with a little less risk than the market at large. If you're expecting the market to trade in a range or potentially pull back, CVY can provide juicier quarterly distributions while keeping pace with large-cap value U.S. stocks. You can listen to the ETF Expert Radio Show "LIVE", via podcast or on your iPod. You can follow me on Twitter @ETFexpert.